Written by Craig D. Robins, Esq.
The two major reasons why people who know they need to file for bankruptcy, but put off doing so, is anxiety about filing, and concern about paying the legal fees.
Some consumers consider filing themselves. However, this can be a major mistake and create additional problems. Here’s why:
In every bankruptcy case, the debtor must appear before a court-appointed trustee. The trustee is not your friend. To the contrary, the essential purpose of the trustee is to investigate the debtor and determine if there are any assets that can be taken for the benefit of creditors. Meeting with an experienced bankruptcy attorney will enable the debtor to have his or her assets reviewed.
What many debtors do not realize is that certain conduct that may have occurred years before filing can have a major impact. For example, giving away assets or transferring an interest in real estate can result in significant litigation in the bankruptcy case. Such matters are regularly reviewed by bankruptcy counsel before a bankruptcy petition is filed. There are many reasons Why Consumer Debtors Can’t Transfer Assets Like a House or Car Before Filing Bankruptcy on Long Island .
The bankruptcy petition is written in plain English, so one would think that it is quite readable. However, a fully-completed petition in a Chapter 7 bankruptcy in New York, when including all of the various forms and schedules, can easily exceed 40 pages. The petition requires preparing numerous schedules and budgets. Proper information about debts and assets must be listed. Not necessarily an easy task.
Then, there are several dozen questions in a Statement of Financial Affairs that must also be answered. The creditors and their addresses must be listed not only ih a schedule of debts (that is broken into three separate categories) but also in a special format called a Matrix.
When Congress drastically overhauled the Bankruptcy Code in 2005, many new requirements were imposed. Now there is a complex and complicated means test, as well as the requirement for mandatory credit counseling. The Chapter 7 trustee as well as the Office of the U.S. Trustee reviews each and every petition to make sure all of the requirements under the new law are properly met. I reviewed issues under the new bankruptcy laws in several posts. Here’s one: Bankruptcy Judges Convene to Discuss New Bankruptcy Laws on their One Year Anniversary .
In addition, the means test is very tricky. Failure to properly prepare the bankruptcy means test can spell disaster as the United States Trustee can seek to have the bankruptcy case dismissed. The Means Test is Often the Key to a Successful Chapter 7 Bankruptcy Case .
Another important aspect is Determining Household Size for the Means Test . If the bankruptcy court determines that the debtor did not include the proper number of family or household members for the means test calculation, the means test eligibility can change, resulting in an abusive filing situation.
Consumers must also choose which Chapter 0f bankruptcy to file. If a consumer is seeking to stop foreclosure and cure mortgage arrears, A Chapter 7 filing won’t do the trick.
Of course, there are many books that explain how to do the process. They are all several hundred pages long. Yes, any American consumer can file their own bankruptcy petition. However, there are so many traps for the unwary that even attorneys who do not regularly practice bankruptcy often get their clients into hot water.
A good bankruptcy attorney will also prepare the client for the meeting of creditors. For example, How Much Should You Say at the Meeting of Creditors in Bankruptcy Court? 
Every trustee I know on Long Island has expressed concern about those consumers who file bankruptcy without an attorney because these consumers often make serious mistakes with the procedure. Many consumers who file on their own get bad advice from a friend or relative. When it Comes to Bankruptcy, Don’t Listen to Uncle Joey .
Self-representation by pro-se debtors in bankruptcy matters can end up being penny-wise, but pound-foolish. This is one of Three Reasons Why a Chapter 7 Bankruptcy Case Can Go Bad .